Moody's May 27 upgraded the United Arab Emirates' ratings outlook to stable from negative, citing effective policy response to low oil prices, expected improvement in fiscal and current account positions, and economic growth prospects.
The rating agency affirmed the UAE's long-term Aa2 issuer rating while the country's long- and short-term foreign-currency bond and deposit ceilings were unchanged at Aa2 and Prime-1, respectively.
The rating agency noted that lower oil prices prompted the government to implement reforms strengthening policy making and planning.
Moody's expects the country's consolidated government debt to stabilize at about 20% of GDP in 2017-18, saying Dubai and Abu Dhabi account for the majority of the general government debt, with the former shouldering the largest portion.
The UAE's relatively diversified economy and strong competitiveness allow it to raise fiscal revenue from non-oil sectors while containing the impact on long-term growth.